A gas station attendant displays a large bundle of naira banknotes after selling fuel to a customer in Port Harcourt, Nigeria, on Friday, Jan. 15, 2016. With his security forces engaged in fighting Boko Haram’s Islamist insurgency in the north, President Muhammadu Buhari can’t afford renewed rebellion in the delta. Photographer: George Osodi/Bloomberg
As Nigerians struggled with inflation and reduced purchasing power, companies raised the salaries of their employees by 18.35 per cent to the tune of N4.57 trillion in the first half of 2023, according to the National Bureau of Statistics (NBS).
The NBS said the compensation of employees, which covers the total payment in cash or kind by employers to workers, increased from its previous value of N24.88 trillion a year ago.
The salary increase reflects the efforts of companies to cushion the impact of growing living costs on their employees, the majority of whom have seen their standard of living affected by the fuel subsidy removal.
The NBS said the compensation of employees grew by 15.08 per cent and 19.41 per cent in real terms in the first and second quarters of 2023 respectively, compared to 6.48 per cent and 3.93 per cent in the first and second quarters of 2022.
The compensation made to employees included cash remuneration, direct social transfers from employers to their workers and pensions that do not set up an independent fund.
Meanwhile, corporations, including small and medium enterprises, recorded an 11.93 per cent increase in their operating surplus to N67.56 trillion in the first half of 2023, from N60.36 trillion in the first half of 2022.
The NBS defined this operating surplus as the profit that remained for firms after covering their costs. The majority of these profits were informed by increases in the price of offered goods and services, further driving up inflation.
The NBS understands that the recent salary increases and profit growth of companies have not yet translated into improved living standards for most Nigerians, who are experiencing record-high inflation and poverty levels on a month-on-month basis.
Inflation had reached 22.79 per cent by the end of June 2023, up from 18.60 per cent in June 2022. Inflation has since risen to 27.33% as of October 2023.
